After World War II, the United States and Britain declared the Austrians a “liberated” people, but the Russians prolonged the occupation. Finally Austria concluded a state treaty with the USSR and the other occupying powers and regained its independence on May 15, 1955. The second Austrian republic, established Dec. 19, 1945, on the basis of the 1920 constitution (amended in 1929), was declared by the federal parliament to be permanently neutral.

On June 8, 1986, former UN secretary-general Kurt Waldheim was elected to the ceremonial office of president in a campaign marked by controversy over his alleged links to Nazi war crimes in Yugoslavia. Austria became a member of the European Union in 1995, but it retained its strict constitutional neutrality and forbade the stationing of foreign troops on its soil.

In Feb. 2000, the conservative People's Party formed a coalition with the far-right Freedom Party, headed by Jörg Haider. A nationalist against immigration, Haider had made several controversial remarks praising some Nazi policies, which he has since recanted. His gradual rise to power was credited to voters weary of decades of stasis under the rule of the Social Democrats.

The European Union condemned Austria's new coalition, froze diplomatic contacts, and imposed sanctions, accusing Haider of being a racist, xenophobe, and Nazi sympathizer. Given the controversy, Haider chose not to join the government, but he continued to wield influence from the sidelines.